Internal Managers Trump outside Pension Advisors

Zurich Scudder's Mutual Fund Business Moves to Chicago Zurich Scudder Investments plans to cut staff and move its U.S. mutual fund business from Boston to Chicago, according to Bloomberg. The report indicated that some account managers and support operations staff

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Zurich Scudder’s Mutual Fund Business Moves to Chicago
Zurich Scudder Investments plans to cut staff and move its U.S. mutual fund business from Boston to Chicago, according to Bloomberg. The report indicated that some account managers and support/operations staff would remain in Boston.3-Plansponsor.comAIM Small Cap Growth Fund To Close To New Investors
The AIM Small Cap Growth Fund will close to new investors at 3 p.m. CST on Monday, March 18, 2002. The fund was originally closed to new investors from Nov. 8, 1999, until Aug. 20, 2001 – but with the fund’s net assets now above $1 billion, the fund’s managers/directors believe closing the fund will be in the best interest of shareholders.3-Plansponsor.comToronto Firm Launches Multi-Strategy Fund
Arrow Hedge Partners, a Toronto investment firm, announced launch of the Arrow Multi-Strategy Fund. Arrow executives said in a press release that the goal of the new fund is to provide institutional and high net worth investors with a global portfolio of different investment styles, strategies and asset classes that is managed by several managers. The company said the Arrow Multi-Strategy Fund allocates to eight Arrow Single Manager Funds including:Arrow Goodwood Fund, a Canadian equity hedge fund advised by Peter Puccetti of Goodwood Inc., Toronto Arrow Capital Advance Fund, a US equity hedge fund advised by Mark Lelekacs of Capital Advance Investment Management LLC, Tampa, Florida Arrow Eagle & Dominion Fund, a US small and mid-cap equity hedge fund advised by Duncan Byatt and Andrew Trower of Eagle & Dominion Asset Management Ltd., London Arrow White Mountain Fund, a European equity hedge fund, advised by Kevin Doyle and Sarah Caygill of Doyle Caygill Capital SA, Geneva, Switzerland Arrow WF Asia Fund, an Asian equity hedge fund advised by Scobie Ward and Peter Ferry of Ward Ferry Management Ltd., Hong Kong Arrow Ascendant Capital Fund, a market neutral arbitrage fund advised by David Jarvis and Rick Kung of Ascendant Capital Management Inc., Toronto Arrow Milford Capital Fund, a high-yield US bond fund advised by Chris Currie of Milford Capital Management Inc. Arrow Epic Capital Fund, a Canadian equity hedge fund advised by David Fawcett and Tom Schenkel of Epic Capital Management Inc., of Toronto.3-Plansponsor.comHewitt Plans to Get Morningstar Reports
Participants in retirement plans run by Hewitt Associates will soon have access to mutual fund research reports by Morningstar, Inc., Morningstar announced.Morningstar said it would create custom reports on 1,000 funds including privately managed separate accounts, commingled funds, equity and fixed-income funds and company stock funds.The company said each report will include volatility measurements, Morningstar’s proprietary ranking, top 10 holdings, and portfolio characteristics. The reports will be available on Hewitt’s Your Benefits Resource Web site this summer, Morningstar said.3-Plansponsor.comInternal Managers Trump outside Pension Advisors
Pension funds with on-staff advisors end up with better investment results than those who outsource their asset management tasks, a UK study found.The study of 28 internally managed funds managing 158 billion pounds showed that the funds enjoyed lower risks, which resulted in higher average total returns. The study was undertaken by WM Company, a research firm.According to WM, the majority of the internal funds actively manage their UK equities. The funds produced a 0.3% average annual return over rolling three and five-year periods.Similar results apply for North American stocks, while European equities turned in a 0.2% average annual gain, again showing a “significantly lower dispersion of returns”, according to WM. The only area where outside managers triumphed was with Japan equities and UK bonds.The funds held an average 212 UK stocks – much more than the average portfolio managed outside, WM said.Lower Turnover Means Lower CostBut the internal funds’ activity was much lower. Average portfolio turnover was 31% for internal UK equities, compared with 53% externally. For European equities the ratios were 74% versus 85%. For UK bonds the internal rate of change was at 82% compared with 141% for external. WM said the lower portfolio turnover gives internally managed funds a strong advantage due to their lower cost base, it notes. WM also point out that internal funds have a lower risk profile with an average tracking annual error of 1.6%, which is equivalent to the 75th percentile for external funds. This puts internal funds in the lowest quartile of riskiness. Funds involved in the study represent a quarter of the UK pension market, compared with 46% 15 years ago. In 80% of these funds, six out of 10 members are either inactive workers or